Land Sales and Rental Markets in Transition: Evidence from Rural Vietnam

Abstract

The extent to which households should be allowed to transfer their land rights in post-socialist transition economies is of considerable policy interest. Deininger and Jin use data from Vietnam, a transition country that allows rental and sales of land use rights, to identify factors conducive to the development of land markets and to assess the extent to which land transfers enhance productive efficiency and transfer land to the poor. They find that activity in both rental and sales markets has increased rapidly, enhanced by the possession of long-term use rights and off-farm employment, and contributing to greater equity and efficiency of land use. While there is evidence for distress sales by households that experience a shock (death), the scope for such sales is reduced by well-functioning credit markets. Well-defined land rights and appropriate safety nets will thus help transition economies to realize the benefits from the operation of land markets.

This paper - a product of Rural Development, Development Research Group - is part of a larger effort in the group to assess the impact of land policy on equity and productive development.